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On Wednesday, Woodside Energy Group Ltd (ASX:WDS) saw its share price gain 0.3%, trading at AU$24.20. This contrasts with a slight decline of 0.2% in the broader S&P/ASX 200 Index (ASX:XJO) at the same time. The modest uptick in Woodside's shares comes as the company announces a significant new long-term agreement in the liquefied natural gas (LNG) sector.
New Long-Term LNG Agreement
Woodside’s share price is receiving a boost following the company’s announcement of a new sale and purchase agreement (SPA) with JERA, Japan’s largest power generation company. Under this agreement, Woodside will supply approximately 400,000 tonnes of LNG annually—equivalent to six cargoes—over the next 10 years, starting from April 2026.
The LNG supplied will be sourced from Woodside's global portfolio, reinforcing the company's strategic relationship with JERA. This agreement marks Woodside’s first long-term LNG sale to JERA from its international operations.
Woodside’s executive vice president and chief commercial officer, Mark Abbotsford, emphasized that the agreement strengthens Woodside's commitment to exploring further business opportunities with JERA. He noted that this deal aligns with the company’s strategy to cater to the growing demand for reliable energy sources in the Asian market and supports Japan's efforts to decarbonize.
Impact of Oil Price Movements
Woodside’s stock performance is also likely benefiting from a recent increase in oil prices. Brent crude oil prices rose by 1.3% overnight, reaching US$73.70 per barrel. This rise contrasts with the overall challenging environment in the oil market, where Brent crude prices have fallen 22% over the past year from US$94.43 per barrel.
Historical Performance and Outlook
Despite the recent gains, it has been a challenging year for Woodside shareholders. The company’s share price has declined by 36% over the past year, reflecting the broader slump in global oil prices. The recent uptick in oil prices and the new LNG agreement may provide some relief, but Woodside continues to navigate a volatile market environment.
